It’s vehicle log book time again!
There are only 16 short weeks until the end of the financial year (freak out!). If you haven’t yet recorded a vehicle log book for tax purposes for the 2016 tax year, you need to start now. This is because a log book must be kept for 12 continuous weeks. So what is a vehicle log book and how does it relate to expense claims?
If you intend to claim motor vehicle expenses such as fuel, oil, repairs, registration etc. on your tax return, you first need to keep a log book of travel for 12 continuous weeks. You record the odometer readings of each trip and notes about the travel i.e. where, what, why. At the end of 12 weeks, you will be able to work out the business-use percentage of vehicle travel. This percentage is used to work out how much you can claim on your motor vehicle expenses. For example, your business-use percentage might be 20% so therefore, you will claim 20% of all costs (or your accountant will!).
As noted, you can claim running costs of the vehicle and decline in value but certainly not any capital costs like the purchase price of the car or the monies loaned if involved. Note, for any other costs besides, fuel and oils, you will need written evidence i.e. receipts and bill copies.
While a written log book is a good idea (available from most stationers) a better way to keep your log book is electronically. An app I use is available for both iOS and Android called Logit Fleet Care. It’s very easy to use and at the end of 12 weeks, you can download a spreadsheet with all data kept that you can provide to your accountant or bookkeeper (or use yourself if you lodge your own tax returns).
Okay, so there you have it. Need to know your business-use percentage for the 2016 tax year? Better get going now because June 30 is just around the corner!
PS – this information is very general in nature. Please obtain more specific advice about your financial situation from your financial professional.